WTL’s restructure swoops in on the largest wealth transfer in history

WTL’s restructure swoops in on the largest wealth transfer in history

Date of Report 05/10/2021
ASX: WTL

Price A$0.105

52 Week Range: A$0.045 - 0.140

Market Cap: A$29.45M

Sector: Diversified Financials

Every second week we invite a leading fund manager to present at The Insider: Meet the Fund Manager. Lee IaFrate, from Armytage Private Limited, selected WT Financial Group (ASX: WTL), a financial services provider that is well positioned to benefit from the regulatory changes following the 2017 royal commission.

July 16th, 2021

August 4th, 2021

The Insider: Meet the Fund Manager sessions are a great way to hear directly from leading fund managers. They share their approach to investing, favourite companies and their market view for the year ahead.

The Insider: Meet the CEO sessions feature a selection of company leaders who provide a succinct overview of big things their companies are doing. 

Big banks are all but cutting out their financial services, citing increased cost pressures as a result of the regulatory changes following the 2017 royal commission. 

Meanwhile, advisers that are independent business operators are having a field day as the demand for financial services grows like never before.

Australia is at the doorstep of the largest intergenerational wealth transfer in history. In the next 15-20 years, some $3.5 trillion will be transferred to the next generation, increasing the demand for specialised services to deal with the likes of retirement and end-of-life finances, as well as wills and estate planning.

“In Australia, the Australian investor will require more financial planning than not. The Government is not making it any easier with changes to legislation almost daily. The need for quality advice is only going to go up,” said Lee IaFrate, Executive Chairman of Armytage Private Limited.

These circumstances mean opportunities abound for independent provider WT Financial Group (ASX: WTL).

“The royal commission forced us to have a rethink as to our approach to ensure we were unlocking shareholder value and had a sustainable business moving forward,” WTL Founder and Managing Director Keith Cullen said.

“We’ve turned industry disruption on its head. Instead of it being a burden to us, we’re capitalising on it and we’ve turned it into an opportunity.”

Central to WTL’s strategy was transitioning from a business-to-consumer focus to a business-to-business model. WTL now primarily provides services to advisers that are independent business operators. The services include licensing and compliance, education and training, technical support, practice management, and business development.

According to Mr IaFrate, it’s WTL’s recent acquisition of Sentry Group that is another “company-changing deal”.

On completion of the acquisition, WTL will have 275 financial advisers across 200 practices in Australia, up from 42 advisers just three years ago.

“If you look at what’s going on in the dealer group and financial planning networks, these are becoming very sought-after assets,” Mr IaFrate said.

Mr laFrate expects the market to rerate WTL very strongly as a result of these company moves. Prior to the restructure, WTL had a market cap of around $2-3 million. Today that figure sits at $28 million. The company expects a FY22 revenue guidance of around $70 million, and a net profit of more than $2 million after tax guidance.

“We are very happy investors,” Mr IaFrate said.

Click here to view more videos from Mr IaFrate’s Meet the Fund Manager session, or click here to view the full The Insider: Meet the CEOs.

 

The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.

Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.

The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.

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The CEOs of all the companies chosen as Fund Manager favourite stocks are invited to present at our Meet the CEO series. Reach does not assume responsibility for the accuracy or completeness of any information provided, and the views expressed are not reflective of Reach Markets position.
Any advice contained within this presentation is general advice and does not consider your personal circumstance, you should consider whether it’s appropriate for you.
The information we are giving you is for educational purposes only. “Investing is about understanding your risk” and every time you invest in the share market there is a risk of loss.